Risking Other People’s Money: Experimental Evidence on Bonus Schemes, Competition, and Altruism

Ola Andersson, Hakan Holm, Jean-Robert Tyran and Erik Wengström

No 989, Working Paper Series from Research Institute of Industrial Economics

Abstract: We study risk taking on behalf of others in an experiment on a large random sample. The decision makers in our experiment are facing high-powered incentives to increase the risk on behalf of others through hedged compensation contracts or with tournament incentives. Compared to a baseline condition without such incentives, we find that the decision makers respond strongly to these incentives that result in an increased risk exposure of others. However, we find that the increase in risk taking is mitigated by altruistic preferences and pro-social personality traits.

Keywords: Incentives; Competition; Hedging; Risk taking; Social preferences (search for similar items in EconPapers)
JEL-codes: C72 C90 D30 D81 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2013-11-19
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-gth, nep-hrm and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
https://www.ifn.se/wfiles/wp/wp989.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0989

Access Statistics for this paper

More papers in Working Paper Series from Research Institute of Industrial Economics Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Elisabeth Gustafsson ().